YE2019 - Q12020 | Real Estate Market Overview |...

YE2019 - Q12020 | Real Estate Market Overview | Greece Athens | May, 2020 | Private & Confidential

Delfi Partners | Real Estate Market Research | Private & Confidential | 2 |

1.0

Greece Real Estate Market: Synopsis

Greek Economy 2019 Policy Responses to the Pandemic

Apartment Prices 2019Real Estate Supply

Broad-based recovery led by exports

and public consumption

• GDP continues to increase at positive rate of

1.9% (2019). Data are provisional with a second

estimate expected in October 2020

• Unemployment down to 16.6% (12/2019) from

27.5% in 2013. Euro area unemployment at

7.3% (February 2020)

• Inflation rate is muted and is expected to remain

at low levels (0.9%)

• NPLs-to-Gross Loans down to 42.1% (Sep.

2019) from 46.7% in September 2018

Fiscal Policy expected to do the

heavy-lifting to combat Covid-19

• Fiscal measures announced to support

economy and private sector corporations and

employees. The second wave of budgetary

measures amounts to 3.8 bil. Euros.

• ENFIA tax will be calculated according to

previous status quo and new fair value prices

will kick in 2021.

• European Investment Bank to provide 2 bn

euros liquidity to corporations.

• ECB expected to maintain accommodative

policy and Asset Purchases.

YoY increase of 7.5% compared to

2018

• Apartment prices are increasing but they remain

at low levels

• Relative to Q1-2019, prices of apartments older

than 5 years grew by 4%. New up to 5 yeas

grew at 6.4%

• On a y-o-y basis, apartment prices in Athens

grew by 11% and apartment prices in

Thessaloniki by 5.5%

• Apartment prices are driven by short rent

platforms and “Golden Visa” investors.

Number of building permits increase in

2019

• Total building activity at a country level has

increased by 16.6% (Feb 2019- Jan.2020)

• Production Index of Building Construction which

measures value of construction of buildings

(residential and non-residential) along with site

formation, demolition, and general works for

buildings has dropped by 5.7% y-o-y basis.

Synopsis

Global Economy Q1 2020

Coronavirus pandemic freezes

economic activity

• IMF states that GDP per capita shrinking in 170

countries due to pandemic is now an optimistic

scenario

• According to the IMF, the global economy is

forecasted to shrink by 3% as a base case

scenario and expected to bounce back in 2021

• The recovery is largely dependent on how long

the outbreak will last

• More than 300,000 people have lost their lives

until May 2020.

House Prices 2019

Prices of Dwellings continue to

increase in 2019

• Prices of dwellings increased by 7.5% on a y-o-

y basis

• Percentage change in Q4 -2019 relative to Q1-

2019 comes at 5%

• Domestic demand for houses is expected to

increase as a result of low costs of financing

and reduction of NPL levels on banks’ balance

sheets

Main drivers of growth in 2019 are exports of goods and services and government consumption.

Impact of Covid-19 cannot be quantified yet. Expectations range from 0% to -10% GDP growth in 2020.

1 General Government Gross Debt as a percentage of GDP (2018)

Source: Eurostat

IMF expectations

Source: Eurostat, European Commission Projections

Source: ELSTAT

Key Figures


2.0

Greek Economy grew in 2019. Impact from pandemic estimated at -10% on GDP growth

Greek Economy

GDP Growth

Unemployment

Inflation

Investments (bn), ‘19)

1.9% Expected to shrink

16.6%

0.9%

€ 21.4 5% compared to 2018

Government Debt1 181.1% Expected to increase to 200%

Expected to increase, highly uncertain

Not expected to change in short-run

Source: ELSTAT

-0.3%

-4%-5%

-9%

-7%

-3%

1%0% 0%

2% 2% 2% 2%

-10%-12.0%

-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2020

Real GDP Growth

Real GDP Covid Effect

EC Forecast ignoring COVID

0

2000

4000

6000

8000

10000

2018 Q1 2018 Q2 2018 Q3 2018 Q4 2019 Q1 2019 Q2 2019 Q3 2019 Q4

Gross Fixed Capital Formation (mil. €)

Dwellings Other buildings and structures

Cultivated biological resources Total Machinery

Transport equipment +weapon systems Information Communication Technology (ICT) equipment

Other machinery and equipment +weapon systems Intellectual property products

49,958

52,86654,845

54,83557,837

55,931

53,059

59,45466,736

6971069,452

66,88963,353

59,91562,130

55,840

54,31761,292

67,218 69728

40,000

45,000

50,000

55,000

60,000

65,000

70,000

75,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Exports/Imports in mn €

Exports Imports

IMF Forecast accounting for COVID

Tourism is one of the leading contributors to GDP with a share of over 20%.

Total arrivals are continuously increasing since 2010 signalling increasing demand for Greek destinations. In dealing with Covid-19 Greece has gained credibility which

should be cashed during the 2021 season.

Source: Insete

*Excludes cruises

Source: Insete


3.0 Tourism Industry

15,00716,427 15,518

17,920

22,03323,599

24,79927,194

30,123

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2010 2011 2012 2013 2014 2015 2016 2017 2018

Total Arrivals* ('000s)

Source: Insete

*2018 data are provisional

** Cruise data not included

68.6 69.6 71.1 73.170.4

73.9

67.0 67.7 69.0

40.0

50.0

60.0

70.0

80.0

2010 2011 2012 2013 2014 2015 2016 2017 2018*

Average Spend/Nightby country of Origin (€)

Eurozone EU countries outside Eurozone

Other Countries Total Border Survey**

22.1 21.8 25.5

47.1

66.8 75.276.8

66.3

22.3 23.6 26.1

52.8

68.1

74.8 76.2

65.8

0

20

40

60

80

100

Jan Feb Mar Apr May Jun Jul Aug

Hotel Occupancy Rates

2017 2018

• Average spend per night has exhibited a modest increase and remains lower than 2015 levels

• Other Countries segment includes US, Australia and Switzerland with 89.1,84.3 and 85.1€ spend

on average per night. From those countries only US tourists spent more in 2018 than in 2017

• 2018 Occupancy rates are fairly stable on a y-o-y basis

• Bank of Greece provisional data for January to March 2019 period showed a surplus of 212 mn € in

balance of travel services, up from 127 mn € surplus in same period for 2018

• UK tourists form a significant share of inbound arrivals. BREXIT negotiations pose a risk for Greek

tourism to the extent of the deal reached. Recent collapse of Thomas Cook will cost the economy

0.5bn€ according to government officials

• For the period of 2019 according to preliminary data, arrivals are estimated at over 30 million and

generating approximately 18 bil euros in revenues

• Hotel units are estimated at 9,917

Greece scores first with 87.9% in hotel satisfaction index (GRI), June 2019 data.

10 Year Greek Benchmark Government Bond yields drop to new lows, 2% on April. Yields increased during the period of lockdown

Investor confidence to Greek economy picked up during 2019, as did the Bank Equity Market Index. The effect of the pandemic is apparent in bank equity sector.

Source: Bloomberg


4.0 Banking Sector

Source: Athens Stock Exchange

NPLs dropped to 42.1% but bad-debt management issue still looms over economy.

49.1 49.1 48.7

47.2

48.647.8

46.7

45.4 45.1

43.6

42.1

38

40

42

44

46

48

50

Mar2017

Jun2017

Sep2017

Dec2017

Mar2018

Jun2018

Sep2018

Dec2018

Mar2019

Jun2019

Sep2019

NPL Ratio

Source: Bank of Greece

• Greece’s cost of financing has dropped to low levels, which can be used to finance more growth-

oriented policies and provide stimulus for economic recovery in response to the lockdown

• Confidence to Greek economy seems to cascade down to the financial sector with bank stocks

gaining in price before the lockdown and the prospects of a potential recession

• According to Bank of Greece data, total deposits and repos from private sector stood at 143 bn € , a

6.3% 12-month change (Public Source, December 2019)

• On the downside, Greece is the worst performing country in Euro area in terms of NPL ratio. NPLs

are a drag on banks’ balance sheets and hinder their ability to issue new loans to customers

• Greek banks Tier 1 Capital Ratio was estimated at 15.3% (ECB, January 2019) well above Basel III

minimum requirement of 6%. Greece’s Tier 1 ratio is at the average of Euro Area level

• In dealing with the global pandemic there is uncertainty on the impact of Covid-19 on bank balance

sheets through the management of non-performing loans

• Securitization is brought to halt at least until H2 2020

0

2

4

6

8

10

12

14

16

Jan-

15

Apr

-15

Jul-1

5

Oct

-15

Jan-

16

Apr

-16

Jul-1

6

Oct

-16

Jan-

17

Apr

-17

Jul-1

7

Oct

-17

Jan-

18

Apr

-18

Jul-1

8

Oct

-18

Jan-

19

Apr

-19

Jul-1

9

Oct

-19

Jan-

20

Apr

-20

10 Year Greek GovernmentBenchmark Bond Yield

785

862

577

440

552

806 829883

344

250

350

450

550

650

750

850

950

Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020

FTSE Bank IndexQuarterly Closing Prices

Source: ELSTAT Delfi Partners | Real Estate Market Research | Private & Confidential | 6 |

5.0 Population (2011 Census)

Total Population per Region

East Macedonia – Thrace

608,182 (6%)

Central Macedonia

1,882,108(17%)

West Macedonia

283,689 (3%)

Epirus

336,856(3%))

Thessaly

732,762(7%)

Ionian islands

207,855(2%)

West Greece

679,796(6%)

Peloponnese

577,903(5%)

Attica

3,828,434(35%)

North Aegean

199,231(2%)

South Aegean

309,015(3%)

Central Greece

547,390(5%)

According to ELSTAT data from 2011 Census, there were approximately 6.4 million regular residential assets in Greece.

Source: ELSTAT, 2011 CensusSource: ELSTAT, 2011 Census


6.0 Residential Assets Demographics

• Data shows that bulk of construction took place during 1960s to 1990s. There is

significant decrease in the years following 2006, signifying more aged properties

• Highest percentage of residential assets is located in Attica region with Central

Macedonia coming in the second place

• Share of assets occupied are in excess of vacant assets, except for Ionian

Islands, Peloponnese, North and South Aegean where shares are almost

equivalent

• We should note that most of the assets are available to rent while available for

sale are less than 1% of total regular assets

Residential market 2011 snapshot.

Source: ELSTAT, 2011 Census

Period of

ConstructionTotal

Detached

House2 floor house

Apartment

BuildingOther

Before 1919 163,759 139,270 18,952 5,016 521

1919 - 1945 318,372 256,942 43,748 16,902 780

1946 - 1960 605,693 393,987 105,838 104,431 1,437

1961 - 1970 1,002,902 385,796 174,220 440,342 2,544

1971 - 1980 1,437,424 382,443 229,831 820,853 4,297

1981 - 1990 1,049,931 357,608 202,350 486,189 3,784

1991 - 2000 806,977 261,589 138,610 403,882 2,896

2001 - 2005 539,009 149,230 76,783 311,497 1,499

after 2006 447,834 130,572 58,669 256,971 1,622

Total 6,371,901 2,457,437 1,049,001 2,846,083 19,380

Country Level 6,384,353

East Mac. Thrace 340,682

Centr.Macedonia 1,076,148

West Macedonia 159,409

Epirus 204,948

Thessaly 397,301

Central Greece 359,236

Ionian Islands 160,298

West Greece 390,609

Peloponese 411,462

Attiki 2,121,155

North Aegean 151,449

South Aegean 229,919

Crete 381,737

Total Residential Assets

0%

10%

20%

30%

40%

50%

60%

70%

80%

Cou

ntry

Lev

el

Eas

t Mac

. Thr

ace

Cen

tr.M

aced

onia

Wes

t Mac

edon

ia

Epi

rus

The

ssal

y

Cen

tral

Gre

ece

Ioni

an Is

land

s

Wes

t Gre

ece

Pel

opon

ese

Atti

ki

Nor

th A

egea

n

Sou

th A

egea

n

Cre

te

Status of Residential Properties

Occupied Vacant For Rent For Sale

Although prices are normalizing, they remain at low levels. Fiscal measures announced by the new government and heightened confidence to the economy are expected to drive real

estate market. The pandemic has shocked global housing prices and the challenge for the Greek real estate market is the level of relative return it can provide to investors.

Source: Bank for International Settlements


6.1 Greece Real Estate Market


• House prices have lost over 30% of value compared to peak in nominal terms

• Apartment Indices in Athens and Thessaloniki show that prices are at early stages of recovery

• The impact of the lockdown has not been quantified yet

After 7 years of economy recession, Real Estate market shows signs of recovery.


* Region Capital cities except for Athens and Thessaloniki

100.9 96.3

93.2 87.2

76.9

67.5 61.1

57.9 56.8 56.2 57.7 63.8

101.5 95.4 88.4

82.4

71.2 64.7 60.5 57.2 55.3

54.5 55.0

58.850.0

60.0

70.0

80.0

90.0

100.0

110.0

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Athens and ThessalonikiApartment Index

Athens Thessaloniki

103.3101.3

95.4

91.2

80.7

73.369.7

66.564.6 64.1 64.8

67.8

60

65

70

75

80

85

90

95

100

105

110

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Other Areas Apartment Index*

96.74 97.52 97.59 99.77 102.51 105.29 108.46 111.94 116.57 118.04

70.26 68.6 67.37 65.58 64.22 63.92 63.56 63.08 63.53 64.51 66.88 70.41

5060708090

100110120

Residential Nominal PricesQuarter Index

Euro Area Residential Nominal Prices (2010=100) Greece Residential Nominal Prices (2010=100)

Golden Visa Scheme has attracted foreign investor interest in channelling funds to Greek residential market. A minimum investment of 250K is required to qualify for the

scheme. The impact of the pandemic and the drop in prices could also be a driver of exogenous demand

Source: Ministry for Migration Policy



Source: Ministry for Migration Policy

• Golden Visa scheme is a driver of demand for residential house prices. Since its inception permits for

individuals seeking to qualify for the scheme have increased at an exponential rate

• Chinese citizens have the lion’s share in residence permits issued and show a preference for residential

assets in the centre of Athens

• On the other hand domestic purchase ability remains weak, predominantly due to lack of access in means

to finance a home purchase

• Fiscal measures announced by the government are expected to increase both domestic demand – in

terms of purchase ability – and foreign demand, as tax burdens on residential properties decrease

Demand for houses is predominantly exogenous, but this is likely to change


5.9

8.0

13.6

15.4

12.4

8.06.6

4.5 4.73.3

1.40.7 0.5 0.5 0.2

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Residential Loans (bn €)

5352

520

379

158

152

120

94

74

64

59

437

0 1000 2000 3000 4000 5000 6000

China

Turkey

Russia

Lebanon

Egypt

Iran

Iraq

Ukraine

Jordan

Syria

Other

Residence Permits to InvestorsTop-10 Countries (03/2020)

364781

1267

2226

4107

7187 7414

0

1000

2000

3000

4000

5000

6000

7000

8000

2014 2015 2016 2017 2018 2019 Mar-20

Residence Permits to InvestorsTImeseries



According to Bank of Greece data, apartments in Athens have continued to

increase in price during the final quarters of 2019. Mean asking prices

during the first quarter of 2020 echo this steady increase which is expected

to come to a halt as transactions freeze and uncertainty risk rises.

On a year on year basis (Q1 2020 to Q1 2019) mean asking prices in

properties in Athens have increased. Piraeus housing market shows signs

of higher demand while prices in Athens are still growing but at lower rates.

Demand for residential properties in Athens remains at high levels

Source: Delfi Analytics, 2020

House Asking Prices (€/sqm)

Q1 2020 Q1 2019 % Change

Athens-Center 1571 1500 5%

Athens North Sub. 2246 2162 4%

Athens South Sub 2593 2500 4%

Athens West Sub 1273 1176 8%

Athens East sub 1518 1450 5%

Piraeus 1444 1302 11%



Rent prices have followed suit but grew at a slower rate than purchase prices. On

average, rent prices continue to exhibit positive slope. Data show that rents have

increased the most in West Suburbs and Piraeus, with rent growth rates showing

mixed signs in different areas of Athens.

During Q1 2020 rent asking prices in Athens centre continue to decrease

compared to Q1 2019 and Q1 2018. Demand for rents picks up steam in other

areas according to table below.

Athens rent prices are also on the upside


Rent Asking Prices (€/sqm)

Q1 2020 Q1 2019 % Change

Athens-Center 9.44 9.91 -5%

Athens North Sub. 8.39 8 5%

Athens South Sub 10.59 10.7 -1%

Athens West Sub 6.22 5.71 9%

Athens East sub 6.25 5.83 7%

Piraeus 7.6 7 9%



As seen in page 9, apartment prices in Thessaloniki were less convex compared

to Athens prices. Prices in Thessaloniki were more exposed on the downside as

crisis unfolded and slower to bounce back as economy was transitioning to

recovery.

From our data we see mean asking prices at a municipality level increasing at a

staggering 28% on a y-o-y basis. Within the rest of Thessaloniki and its suburbs

growth was at lower rates.

Thessaloniki asking prices grow above national level.

Rent market in Thessaloniki seems less active with rent prices increasing nearly

or above double digits on the regional level.

Highest increase is witnessed outside the Municipality area. Demand for lease

seems to pick up in Rest of Thessaloniki.




Q1 2020 Q1 2019 % Change

Thessaloniki - Municipality 1476 1154 28%

Thessaloniki - Suburbs 1120 1037 8%

Rest of Thessaloniki 800 781 2%

Rent Asking Prices (€/sqm)

Q1 2020 Q1 2019 % Change

Thessaloniki - Municipality 7.6 7 9%

Thessaloniki - Suburbs 5.3 4.8 10%

Rest of Thessaloniki 3.8 2.8 36%



The overall map of asking prices shows that on average asking prices in islands

increased but at a slower rate than the national level of 8%, with the exception of

Sporades.

Peak of demand in Corfu is worth noticing as the island is a growing tourist

destination with new hotel investments taking place. Mature primary destinations

such as Cyclades have continued to exhibit positive growth rates.

Asking Prices on Islands are increasing on an average basis.



Q1 2020 Q1 2019 % Change

Dodecanese 1393 1316 6%

Zante 1536 1500 2%

Corfu 1625 1533 6%

Cyclades 2556 2475 3%

Lesvos 1026 1000 3%

Lefkada 1874 1803 4%

Samos 896 917 -2%

Argosaronikos 1827 1714 7%

Sporades 1750 1473 19%


6.7 Residential Assets Transactions

Transactions are picking up steam after reaching a trough in 2014. Demand is predominantly exogenous and facilitated though the Golden

Visa scheme and the low price levels of Greek residential assets. The line chart below shows a time series of transactions according to

most recent data.

Source:ELSTAT

• Detached Houses Transactions in Attica totalled 1,378 over the past two

years.

• The average Detached House was built in 1974 with a size area of 152

sqm and was sold at 1,146 €/sqm.

• The average House/Apartment was built in 1975 with a size of 73 sqm

and was sold at 687 €/sqm.Source: Ministry of Finance

Includes Houses/Apartments and Detached Houses

Source:Ministry of Finance

* Includes Houses/Apartments and Detached Houses

€ 1,333

€ 479

€ 129

€ - € 200 € 400 € 600 € 800 € 1,000 € 1,200 € 1,400

90th percentile

50th percentile

10th percentile

Transactions Attica RegionResidential Properties* (2017-2018)

Construction Year of

Properties DisposedVolume

Average Price (€)

/Sqm Average Main Area

before 1990 23,490 608 72.40

1990 - 1999 1,117 969 105.40

2000-2019 3950 1,222 95.00

157,978

135,967

117,948

83,665

57,65049,774

43,44354,631

60,54069,826

79,532

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Real Estate TransactionsCountry Level


6.8 Residential Assets Transactions (2018)

Transactions in Thessaloniki at the Regional and City Level.


• Detached Houses Transactions in Thessaloniki totalled 346 over the

past two years.

• The average Detached House was built in 1979 with a size area of 112

sqm and was sold at 453 €/sqm.

• The average House/Apartment was built in 1977 with a size of 69 sqm

and was sold at 530 €/sqm.Source: Ministry of Finance

Includes Houses/Apartments and Detached Houses in

Region of Thessaloniki

997

426

128

€ - € 200 € 400 € 600 € 800 € 1,000 € 1,200

90th Percentile

50th Percentile

10th Percentile

Transactions Thessaloniki RegionResidential Properties* (2017-2018)

€ 1,000

€ 429

€ 129

€ - € 200 € 400 € 600 € 800 € 1,000 € 1,200

90th percentile

50th percentile

10th percentile

City of ThessalonikiTransaction Price (€)/Sqm


Construction Year of

Properties DisposedVolume

Average Price (€)

/Sqm Average Main Area

before 1990 6,793 456 68

1990 - 1999 724 673 72

2000-2019 1597 763 81



Transaction Price/sqm in selected prefectures across Greece. Data include both House/Apartment and Detached

House asset sub-types. (1/2)

Source: Ministry of Finance Source: Ministry of Finance

1,207

576

176

0 200 400 600 800 1,000 1,200 1,400

90th Percentile

50th Percentile

10th Percentile

Prefecture of ChalkidikiTransaction Price (€)/Sqm

1,044

395

123

0 200 400 600 800 1,000 1,200

90th Percentile

50th Percentile

10th Percentile

Prefecture of PiraeusTransaction Price(€)/Sqm

1,411

478

127

0 200 400 600 800 1,000 1,200 1,400 1,600

90th Percentile

50th Percentile

10th Percentile

Prefecture of ChaniaTransaction Price(€)/Sqm

Source: Ministry of Finance

1,555

521

105

0 500 1,000 1,500 2,000

90th Percentile

50th Percentile

10th Percentile

Prefecture of DodekanisosTransaction Price(€)/Sqm

2,012

684

162

0 500 1,000 1,500 2,000 2,500

90th Percentile

50th Percentile

10th Percentile

Prefecture of CycladesTransaction Price(€)/Sqm

1,308

591

140

0 200 400 600 800 1,000 1,200 1,400

90th Percentile

50th Percentile

10th Percentile

Prefecture of KerkyraTransaction Price(€)/Sqm

Source: Ministry of Finance Source: Ministry of Finance Source Ministry of Finance



Transaction Price/sqm in selected prefectures across Greece. Data include both House/Apartment and Detached

House asset sub-types. (2/2)

Source: Ministry of Finance Source: Ministry of FinanceSource: Ministry of Finance

Source: Ministry of Finance Source: Ministry of Finance Source: Ministry of Finance

834

278

65

0 200 400 600 800 1,000

90th Percentile

50th Percentile

10th Percentile

Prefecture of EvrosTransaction Price (€)/Sqm

748

345

98

0 100 200 300 400 500 600 700 800

90th Percentile

50th Percentile

10th Percentile

Prefecture of LarisaTransaction Price (€)/Sqm

946

464

166

0 200 400 600 800 1,000

90th Percentile

50th Percentile

10th Percentile

Prefecture of KorinthiaTransaction Price (€)/Sqm

1,171

386

82

0 200 400 600 800 1,000 1,200 1,400

90th Percentile

50th Percentile

10th Percentile

Prefecture of MessiniaTransaction Price (€)/Sqm

613

286

56

0 100 200 300 400 500 600 700

90th Percentile

50th Percentile

10th Percentile

Prefecture of GrevenaTransaction Price (€)/Sqm

638

186

47

0 100 200 300 400 500 600 700

90th Percentile

50th Percentile

10th Percentile

Prefecture of DramaTransaction Price (€)/Sqm


6.11 Auctions of Residential Assets

E- auctions platform was set up in November 2017 to facilitate auction of properties and reinvigorate the real

estate market by attracting investor bid. Majority of auctioned properties ends up in banks.

E-auctions as of 11/2019 up by 53% compared to 2018, but success rate drops.

Source: E-Auctions platform

• For the year of 2018 Eurobank reported 3,195 properties listed in

auctions, with 45% of them carried out successfully.

• Alpha Bank listed 4,195 properties in auctions (9M2018). During 2018

Alpha Bank created a new unit to facilitate repossession and

management of existing portfolio.

• National bank of Greece auctioned 2,264 properties.

• Piraeus Bank carried out 3,269 auctions during 2018 and seeks to

increase them by 12% according to bank’s financial report notes.

• All banks have their own platform to perform auctions electronically.

Source: E-Auctions platform

0.69

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

Auctions Success Rate

Average of 0.65

0

1000

2000

3000

4000

5000

6000

EauctionsMonthly Breakdown

Total Listed Conducted Suspended Canceled


7.0 Greece Office Market

Demand for high-quality office spaces in the centre of Athens or in locations with parking spaces increases.

After a long period of being roughly flat, Office Price index moves towards 2010 levels.


• Property and Facility Management is employed in office spaces to retrofit them and adapt them

to modern working environments.

• Projects that were suspended are resuming in support of the view that demand for office spaces

in central locations is increasing. However, new project pipeline is stagnant.

• Rent prices in high visibility areas, such as Kifisias Avenue and Syntagma, are recovering at

faster rate than remaining areas (see Chart) with the exception of assets in Mesogeion Avenue.

• Vacancy rates at prime CBD areas are below 2010 levels.

• The coronavirus impact in office spaces with regards to rents and supply is expected to be

severe. Rent leases are also likely to be affected with companies renting out either smaller

offices (in the scenario of increased employees working from home) or for a shorter time horizon

due to the uncertain impacts of the pandemic on the economy.

Source: DP Hellas Actual Transaction Data


71.4 70.9 71.1 71.0 71.2 71.2 71.0

74.0

76.5

78.9

80.6

66.0

68.0

70.0

72.0

74.0

76.0

78.0

80.0

82.0

2014 H1 2014H2 2015H1 2015H2 2016H1 2016H2 2017H1 2017H2 2018H1 2018H2 2019H1

Office Price Index2010=100

72.9

71.7 71.6

70.971.2 71

71.5

72.773.3

73.7

75.5

68

69

70

71

72

73

74

75

76

2014 H1 2014H2 2015H1 2015H2 2016H1 2016H2 2017H1 2017H2 2018H1 2018H2 2019H1

Office Rent Index2010=100

26.0

22.0

20.0

18.017.0

16.0 16.5 17.018.0

22.0

18.0

16.0

14.013.0

12.0 12.013.0

14.0

16.0

18.0

14.013.0

11.5 11.010.0 10.0 10.5 11.0 11.5

16.015.0

13.5

10.0

18.0

9

11

13

15

17

19

21

23

25

27

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Office Prime Rent (€/Sqm)

CBD Kifisias Av. Sygrou Av. Mesogeion Av.


7.1 Greece Office Market

Expectation of capital gains does not seem to bring transactions to a halt.

Prime Yields compressing to levels below 7%.


• Prime Yields in the last 6 years have compressed by nearly 250 bps.

• In 2019, drop in yields did not always hinder investors from engaging in transactions,

seeking to be compensated by future expected returns from capital gains.

• Due to the coronavirus pandemic there is heightened uncertainty on expected

capital gains from investments in offices.

• Uncertainty is also apparent on how lease contracts will adjust due to the apparent

change in working conditions.


Office Market Transactions(2019)

• Trastor REIC

- acquired 372 sqm, 3rd floor space at Othonos str, Athens

- acquired 1,600 sqm office space and retail building in Kifisias Avenue, Chalandri

- acquired 5,070 sqm office building in Mesogeion Avenue, Agia Paraskevi

- acquired 3,386 sqm office building in Marousi

- acquired 4,000 sqm office building in Vrilisia

• Interko REIC

- acquired and leased office building in Marousi with area of 3,589 sqm

- acquired 838 sqm building in Kolonaki

• Briq REIC

- acquired 1,788 office building in Chalandri

- acquired 767 sqm office space in Marousi

- acquired 1,629 sqm building in Kolonaki

Office Market Supply

• Dimand SA completed projects in Kalithea and Piraeus Port Plaza

• Noval’s Orbit building in Kifisias Avenue is under development

• New supply of offices is very limited

9.08.8

8.6

8.3

8.0 7.9

7.0

6.5

6.000

6.500

7.000

7.500

8.000

8.500

9.000

9.500

2013 2014 2015 2016 2017 2018 2019 2020

Office Prime Yields


7.2 Greece Retail Market

Tourism industry has been a driver of growth in certain prime areas, such as Athens (Ermou str).

During 2019, Retail activity picked up in prime areas, while stabilizes in secondary retail areas across

the country.



• Following a period of long compression, Retail Price Index gains in price along with

the recovery of the economy

• Rents on the other hand remain fairly constant in 2016 levels

• Household consumption is a strong driver of retail revenues. A recession caused by

the Covid-19 will impact retail revenues but it is also likely to disrupt the industry with

e-commerce gaining more ground

• The financial crisis has barely impacted rents in Ermou street. Downward spiral in

prices was of a short duration with prices bouncing back to pre-crisis levels in 2016

and exceeding them in ensuing years

• Highest drop in prices occurred in Kifisia. Rent prices in both Kolonaki and Kifisia are

roughly flat and below pre-crisis levels


74.2 74

71.3 71.7 71.2 71.272.1

72.8

74.5

76.779.9

71.4 71.7

69.6 70.169.2 69.1

69.970.6

73.6

77.2

80.8

72.1 72.471.2 70.7

71.6

75.6

62

64

66

68

70

72

74

76

78

80

82

2014 H1 2014 H2 2015 H1 2015 H2 2016 H1 2016 H2 2017 H1 2017 H2 2018 H1 2018 H2 2019 H1

Retail Price Index2010=100

General Index Athens Index Thessaloniki Index

71.7

6664.5

62.9 62.6 62.6 62.1 61.9 61.9 61.7 62.4

69.8

64.1

62.561.9 61.8 61.7 61.4

61.561.8

61.2 61.7

76.2

73.5 72.9

69.8 69.1 68.8 68.367.3 66.6 66.3 66.6

55

60

65

70

75

80

2014 H1 2014 H2 2015 H1 2015 H2 2016 H1 2016 H2 2017 H1 2017 H2 2018 H1 2018 H2 2019 H1

Retail Rent Index2010=100

General Index Athens Index Thessaloniki Index

300.0

250.0230.0

200.0180.0 170.0 160.0 165.0 170.0 180.0

210.0

245.0

280.0 285.0

250.0

220.0

180.0

150.0

110.090.0

80.0

80.0 80.0 85.0 85.0 90.0 90.0

100.0

230.0200.0

130.0115.0 105.0 100.0

90.0

90.0 100.0 105.0 115.0 115.0120.0

180.0

150.0

130.0

100.095.0

100.0

140.0

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Retail Prime RentHigh Street (€/sqm)

CBD-Ermou CBD-Kolonaki Kifisia Glyfada


7.3 Greece Retail Market

Transactions are focused on prime retail areas, we do not see activity in shopping centers.



• Prime Yields in early 2019 have compressed to nearly 6% in Ermou str.

• Economic Sentiment Indicator, a good gauge of economy expectations,

according to Eurostat has further increased in February 2020 to 113.2 from

109.5 in end-2019. In March 2020 ESI dropped to 109.4 (December 2019

levels)

• It is worth mentioning that during the period of 2015 – 2019:

- Super Market retail trade has increased by 2.8%

- Department Stores retail trade has dropped by 11.3%

- Household Equipment retail trade has increased by 7.7%

- FnB dropped by 11.4%

- Retail trade not in stores has increased by 25%

Source: ELSTAT

Retail Market Transactions (2019)

• Pangaea REIC

- acquired 1,608 sqm listed property in Mitropoleos str, Athens

- acquired 736 sqm retail property in Athens

- acquired 2,525 sqm property in Ermou street

- acquired 7,000 sqm office and retail in Sygrou street

• Grivalia REIC

- acquired 4,457 sqm commercial building in Glyfada

• Trastor REIC

- acquired 90 sqm fully leased retail unit in Kifisia

- acquired 1,600 sqm office and retail in Chalandri

- acquired 700 sqm retail property in Chania

7.8

7.6

7.2

76.9

6.5

6.2

5.5

6

6.5

7

7.5

8

2014 2015 2016 2017 2018 2019 2020

Retail Prime Yields (%)

137.8

127.9

113.9

104.1 103.0100.0

97.999.6

101.7 102.9

98.2

95.0

100.0

105.0

110.0

115.0

120.0

125.0

130.0

135.0

140.0

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Retail TradeOverall Index


7.4 Greece Industrial Market

General Index of Industrial Turnover exhibits increased volatility, driven predominantly by energy sector. We expect an

increase in demand for logistic CRE assets. Sentiment Indicators plummet due to the pandemic.




3.70 3.703.60 3.60 3.60

3.80 3.80 3.803.90

4.00

3.50

3.00 3.00 3.00 3.00

2.70

2.90

3.10

3.30

3.50

3.70

3.90

4.10

2014 2015 2016 2017 2018

Industrial Prime Rent (€) /Sqm

Ag.Stefanos Aspropirgos Koropi Elefsina

Source: ELSTAT

General Index Change – Right Axis

Sectors Change – Left Axis

Source: Eurostat

11.5

11.15

10.75

10.2

9.75

9

8

9

10

11

12

2014 2015 2016 2017 2018 2019

Industrial Prime Yields(%)

-4.6

9.8

-5.8

14.4

0.2

-7.7

4.3

-8.2

-0.5

-7.2 -8.0

11.3

-10

-5

0

5

10

15

20

-40-30-20-10

0102030

Industrial Turnover Y-o-Y % Change2018-2019

Energy Intermediate Goods Capital Goods

Durable Goods Non Durable Goods General Index

1.70.6 1

1.91.4

22.7

4.5

3.1

-5.6

-8

-6

-4

-2

0

2

4

6

Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20

Industrial Sentiment IndicatorsMonthly Data


7.4 Commercial Real Estate Transactions

Transactions do not include industrial plot, industrial buildings and special use properties. Transaction price (€) /sqm

ranges are presented for selected areas below.

Ministry of Finance has recorded roughly 5,000 commercial real estate transactions with

an average price of 746 €/ Sqm (2017 – 2018).





1,358

476

125

0 200 400 600 800 1,000 1,200 1,400 1,600

90th Percentile

50th Percentile

10th Percentile

Athens CRE TransactionPrice (€)/ Sqm

1,020

424

123

0 200 400 600 800 1,000 1,200

90th Percentile

50th Percentile

10th Percentile

Thessaloniki CRE TransactionPrice (€)/ Sqm

1,574

535

105

0 200 400 600 800 1,000 1,200 1,400 1,600 1,800

90th Percentile

50th Percentile

10th Percentile

Prefecture of DodekanisaCRE Transaction Price (€)/ Sqm


957

479

153

0 200 400 600 800 1,000 1,200

90th Percentile

50th Percentile

10th Percentile

Prefecture of KorinthiaCRE Transaction Price (€)/Sqm

1,081

395

118

0 200 400 600 800 1,000 1,200

90th Percentile

50th Percentile

10th Percentile

Prefecture of PiraeusCRE Transaction Price(€)/Sqm

991

407

100

0 200 400 600 800 1,000 1,200

90th Percentile

50th Percentile

10th Percentile

Prefecture of EvvoiaCRE Transaction Price(€)/Sqm



8.0 Greece Infrastructure Projects and Real Estate

Greek Government pledged to complete the project, considering it as vital for the economy.

Hellinikon Project, one of the largest investment projects in Greece, gains pulse

Source: The Hellinikon Project

Project in a Glance

2 million sqm Metropolitan Park

600,000 sqm of common green areas and opens spaces

50 km of path network for pedestrians and cyclists

Facilities will include a Mall, Marina, Sports Facilities,

Seafront area with luxury residences and Luxury Resort

Total investment of 8 bn

10,000 jobs created during construction

75,000 during operation

Expected to attract 1 million visitors

2.4% contribution to GDP


8.1 Greece Strategic Investments and Project Pipeline (2019)

Ministry of Development has granted “Strategic Investment” Status to the following projects:

The pipeline focuses predominantly in the hotel industry and commercial real estate assets.

Killada Hills

• Project Scope: Golf Resort

• Budget: 345 mn €

• Location: Hermioni, Atgolida

• Company: Dolphin Capital Investment

Itanos Gaia

• Project Scope: Hotel


• Location: Crete

• Company: Minoan Group

The following projects have been submitted for “Strategic Investment Status” approval:

Ithaca Odyssey

• Project Scope: Hotel & residential components


• Location: Ithaca

• Company: Smeder LTD

Lentas Resort & Spa

• Project Scope: Tourist complex (317 rooms)


• Location: Gortina,Heraklion Crete

• Company: Atese SA

Cape Tholos

• Project Scope: 5* Hotel with marina



• Company: Amberland SA

Ithaca Resort

• Project Scope: 5* Resort with golf and marina



• Company: Agyia SA

Other projects in pipeline and notable developments include the following:

Scorpio Bay

• Project Scope: Exclusive Club Resort (60 rooms)


• Location: Scorpios

• Company: Mykinai SA

Mitsis Hotel

• Project Scope: Three 5* Hotels (225 rooms)

• Budget: N/A

• Location: Elia, Mykonos

• Company: Mitsis Hotel Group

Retail Mall Gazi

• Project Scope: Redevelop Mall

• Budget: N/A

• Location: Gazi

• Company: Hines (Joint Venture with NBG)

Hotel Acquisition

• Acquiring Co: Blackstone

• Target: Louis Group

• Scope: 5 Hotels in Greece

• Consideration: 178.6 mn €


10.0 Market Expectations

In the end of 2019 Economic data supported the view of a recovering real estate market. Prices in residential and commercial real estate

assets tagged along GDP growth and exogenous driven demand. Cash transactions showed that the market had still more to give.

Economic activity freezes during lockdown. RE Transactions come to a halt and price impact should be estimated in tandem with the

prolongment of the pandemic and the fear of a second wave of lockdown in winter.

• Projections of a higher than expected recession and lack of monetary policy

tools to counter a prolonged recession

• Travel bans will affect hotels and occupancy rates

• NPL reduction is key to freeing up capital. Not living up to NPL reduction

goals set can limit domestic ability for additional purchase power in

• With regards to fiscal policy intervention economists debate on the potential

inflation risk

• While exiting from the pandemic, Greece has one more arsenal in attracting

capital from abroad: The confidence and credibility it gained while

countering Covid-19

• With house prices remaining even prior to Covid-19 breakout at levels below

peak, the market still remains an attractive candidate for capital allocation

Covid-19 impact on the economy according to economist expectations will

certainly lead to a recession whose severity cannot be safely quantified.

Recession rates estimate from 4% to 10%. To our opinion 10% should be the

baseline.

The impact of the pandemic spirals to global housing prices in an

heterogeneous form. Recovery shape scenarios take more letter forms than U

and V, with the impact on prices having ranges that show the level of the

uncertainty. Inflation levels are expected to remain low. Fiscal and Monetary

Policy mechanisms in the EU are in place, but political will is not strong yet.

Catalysts that can free up real estate market

Domestic demand and more specifically purchase ability with access to

financing is expected to be muted during the pandemic. NPL reduction has

been pushed back by banks at least until H2-2020.

We expect disruptions in the office market due to increase in remote working

and lease term durations. We expect corporations to lease in more flexible

terms with regards to space but also in duration. This should depend on the

ability of employees to work from home at least until a vaccine is found.

Demand for RE assets falls as buyers and sellers wait to see data on the

current status of the market. Opportunities however are still apparent and they

could come in bargain.

Downside risks and opportunities

Delfi Partners & Company | Athens, Greece

Research & Analytics Desk

▪ Greece Office: +30 2169009020

▪ Cyprus Office: +357 22 000060

www.delfipartners.gr | delfipartners.gr/services/delfi-databank

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accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example purposes only.

As between you and DP, you acknowledge that DP owns or has a license to all title and copyrights in and to the content provided in this presentation. All title and intellectual property rights in and to any licensed content provided in this presentation is

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